UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`MICROSTRATEGY, INC.
`
`Petitioner,
`
`V.
`
`Patent of ZILLOW, INC.
`Patent Owner.
`
`Case IPR2013-00034
`
`Patent No. 7,970,674
`
`PATENT OWNER'S OBSERVATIONS ON CROSS EXAMINATION OF
`
`DR. RICHARD A. BORST, Ph. D.
`
`56920-8901.USOO/LEGAL28074157.1
`
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`MICROSTRATEGY, INC.
`
`Petitioner,
`
`V.
`
`Patent of ZILLOW, INC.
`Patent Owner.
`
`Case IPR2013-00034
`
`Patent No. 7,970,674
`
`PATENT OWNER'S OBSERVATIONS ON CROSS EXAMINATION OF
`
`DR. RICHARD A. BORST, Ph. D.
`
`56920-8901.USOO/LEGAL28074157.1
`
`
`
`ZILLOW 2018
`
`ZILLOW 2019
`
`,
`
`ZILLOW 2020
`
`LIST OF EXHIBITS
`
`
`
`Deposition of Dr. Richard A. Borst, Ph. D.,
`Setember 19, 2013
`
`The Common Thread in Market Data systems (1982)
`
`(referred to as "Borst Exhibit 7" during the Borst
`De osition
`
`
`
`A Valuation and Value Updating of Geographically
`Diverse Commercial Properties Using Artificial
`
`Neural Networks (Outline of Paper) (1993) (referred
`
`
`
`
`to as "Borst Exhibit 8" durin; the Borst De osition
`
`
`An Evaluation of Multiple Regression Analysis,
`Comparable Sales Analysis and Artificial Neural
`Networks for the Mass Appraisal of Residential
`Properties in Northern Ireland (1996) (referred to as
`
`"Borst Exhibit 9" durin_ the Borst Deosition
`
`
`Use of GIS to Establish and Update CAMA
`Neighborhoods in Northern Ireland (referred to as
`"Borst Exhibit 10" durin_ the Borst Deosition
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`ZILLOW 2022
`
`An Evaluation of MRA, Comparable Sales Analysis,
`and ANNs for the Mass Appraisal of Residential
`Properties in Northern Ireland (1997) (referred to as
`
`
`
`
`"Borst Exhibit 11" durin_ the Borst De osition
`
`Computer Assisted Mass Appraisal: A New Growth
`
`
`
`Industry in the United States (1979) (referred to as
`"Borst Exhibit 12" durin the Borst De nosition
`
`—_
`MICROSTRATEGY 1001 US. Patent No. 7,970,674 ("Cheng") (referred to as
`"Borst Exhibit 4" during the Borst Deposition) (not
`filed herewith
`
`
`
`
`
`
`MICROSTRATEGY 1003 US. Patent No. 5,847,174 ("Dugan") (referred to as
`
`”Borst Exhibit 2" during the Borst Deposition) (not
`
`filed herewith)
`
`MICROSTRATEGY 1004 US. Patent Publication No. 2005/0154657 ("Kim")
`
`(referred to as "Borst Exhibit 3" during the Borst
`
`
`De osition not filed herewith
`MICROSTRATEGY 1014 Uniform Standards of Professional Appraisal Practice
`
`
`and Advisory Opinions 2005 Edition, Appraisal
`Standards Board, The Appraisal Foundation,
`
`Effective Janua
`1, 2005 referred to as "Borst
`
`56920-8901.USOO/LEGAL28074157.1
`
`ii
`
`
`
` Exhibit 5" during the Borst Deposition) (not filed
`
`herewith
`
`MICROSTRATEGY 1019 Standard on Automated Valuation Models (AVMs),
`
`International Association of Assessing Officers,
`Approved September 2003 (referred to as "Borst
`
`Exhibit 6" during the Borst Deposition) (not filed
`herewith .
`-
`MICROSTRATEGY 1023 Declaration of Dr. Richard Borst (referred to as
`"Borst Exhibit 1" during the Borst Deposition) (not
`filed herewith .
`,
`
`
`
`
`
`56920-8901.USOO/LEGAL28074157.1
`
`iii
`
`
`
`1.
`
`In exhibit ZILLOW 2016, at 6022-5 and 61:5-6, the Witness ("Dr. Borst")
`
`testified that in Cheng "there was no description of some [automatic valuation] .
`
`.
`
`.
`
`process that isn't neither [sic] AVM or CAMA" and "the only thing that's disclosed
`
`is an AVM." This testimony is relevant to the assertion on page 6 of Petitioner's
`
`Reply to Patent Owner Response to Petition filed on August 26, 2013 ("the Reply")
`
`, that Cheng "does not use the term 'automatic valuation' in a context that would lead
`
`one of ordinary skill in the art to limit that term beyond the ordinary meaning of its
`
`constituent words, nor to otherwise establish that those words require the features
`
`of an AVM" and the assertion on page 5 of the Declaration of Dr. Richard Borst
`
`(Exhibit No. MICROSTRATEGY 1023) that "'automatic valuation' would not be
`
`read by those of skill to require any particular type of model." The testimony is
`
`relevant because it contradicts the assertions on page 6 of the Reply and page 5 of
`
`the Declaration of Dr. Richard Borst (Exhibit No. MICROSTRATEGY 1023).
`
`2.
`
`In exhibit ZILLOW 2016, at l45:21-149:10, Dr. Borst testified that several
`
`of his earlier publications related to mass appraisal and CAMA systems do not use
`
`the word "AVM" and that a CAMA system is fundamentally the same as an AVM.
`
`This testimony is relevant to the assertion on page 6 of the Reply that "the term of
`
`art ‘Automated Valuation Model' was not included anywhere in the specification of
`
`[Cheng], nor was it ever before mentioned by the Patent Owner during the original
`
`prosecution of [Cheng]." The testimony is relevant because it illustrates that an
`
`56920-8901.USOO/LEGAL28074157.1
`
`l
`
`
`
`AVM system can be described, and has been described, without using the terms
`
`"AVM" or "Automated Valuation Model."
`
`3.
`
`In exhibit ZILLOW 2016, at 27:15-28:13, Dr. Borst
`
`testified that a
`
`comparable sales analysis ("CSA") AVM uses a computer to "proceed through [a]
`
`list [of properties] one property at a time and find the comparable sales," and at
`
`5029-53:10 and 113111-22, Dr. Borst testified that Dugan specifically discloses the
`
`appraiser or user selecting the comparables on his own (or by accepting
`
`comparable properties recommended by Dugan's system) and that the portions of
`
`Dugan related to selecting comparables do not say that selecting comparable
`
`properties can be performed by a computer. This testimony is relevant to the
`
`assertion on page 9 of the Reply that "one of ordinary skill in the art would have
`
`understood Dugan . .. to describe [a] system[] that could be classified as [an]
`
`AVM." The testimony is relevant because it illustrates that Dugan's system does
`
`not automatically select comparables in the manner of a comparable sales analysis
`
`AVM.
`
`4.
`
`In exhibit ZILLOW 2016, at 9124-9219 and 93:23-94:14, Dr. Borst testified
`
`that a comparable sales AVM has to have a computerized model for selecting
`
`comparables and that, after a human creates a specification for comparables for a
`
`comparable sales AVM, the computer program can select comparables for a large
`
`number of residences automatically. This testimony is relevant to the assertion on
`
`56920.8901.USOO/LEGAL28074157.1
`
`_
`
`_
`
`2
`
`
`
`page 9 of the Reply that "one of ordinary skill in the art would have understood
`
`Dugan. .
`
`. to describe [a] system[] that could be classified as [an] AVM." The
`
`testimony is relevant because, as discussed in Observation #3, Dr. Borst testified
`
`that Dugan does not disclose selection of comparables by a computer, which Dr.
`
`Borst identifies in this testimony as being required of any comparable sales AVM.
`
`5.
`
`In exhibit ZILLOW 2016, at 57:18—25, Dr. Borst testified that "the context in
`
`which the claim or the invention [of Kim] is presented appears in general to be a
`
`single appraisal approach" and further testified at 5222—5319 that by allowing an
`
`operator to scroll from one record to the next, Dugan "does not suggest that it's
`
`doing a mass appraisal." This testimony is relevant to the assertion on page 9 of
`
`the Reply that "one of ordinary skill in the art would have understood Dugan and
`
`Kim to describe systems that could be classified as AVMs." The testimony is
`
`relevant because, in combination with Dr. Borst’s testimony in exhibit ZILLOW
`
`2016 at 9328-11 that it is fair to assume that an AVM has to be capable of doing
`
`mass appraisal, it contradicts the assertion on page 9 of the Reply.
`
`6.
`
`In exhibit ZILLOW 2016, at 110:19—lllz20, Dr. Borst testified that Cheng
`
`discloses use of the AVM by the general public and that neither Kim nor Dugan
`
`discloses use of their systems by the general public, such as a homeowner. This
`
`testimony is relevant to the statement on page 29 of Patent Owner's Response to
`
`the Revised Petition filed on June 14, 2013 ("the Response") that "the relied-upon
`
`56920-8901.USOO/LEGAL28074157.1
`
`3
`
`
`
`portions of [Dugan and Kim] fail to describe or suggest 'wherein the adjustment of
`
`the obtained user input
`
`includes identifying recent sales of nearby properties
`
`regarded by the owner as similar to the distinguished property.
`
`The testimony is
`
`H!
`
`relevant because it supports the statement on page 29 of the Response.
`
`7.
`
`In exhibit ZILLOW 2016, at 1324-9, Dr. Borst testified that if a system is a
`
`. CAMA system, the system is an AVM, at 5524-9 Dr. Borst testified that he does
`not believe that Dugan uses the words "a homeowner adjusting the value calculated
`
`by a CAMA system for his or her own house," and at 58:11—16 Dr. Borst testified
`
`that he had no specific recollection of a homeowner being described in Kim. This.
`
`' testimony is relevant to the statement on page 29 of the Response that "the relied-
`
`upon portions of [Dugan and Kim]
`
`fail
`
`to describe or suggest
`
`'wherein the
`
`adjustment of the obtained user input includes identifying recent sales of nearby
`
`properties regarded by the owner as similar to the distinguished property.” The
`
`testimony is relevant because it supports the statement on page 29 of the Response.
`
`8.
`
`In exhibit ZILLOW 2016, at 120:2-21, Dr. Borst testified/that "automatic
`
`valuation[s]" in the context of the claims of Cheng are not appraisals. This
`
`testimony is relevant to the statement on page 26 of the Response that "an appraisal
`
`is not an 'automatic valuation' as understood by those of ordinary skill in the art."
`
`The testimony is relevant because it establishes that Dugan and Kim's appraisale
`
`56920-8901 .USOO/LEGAL28074157.1
`
`4
`
`
`
`I focused systems are not automatic valuations as understood by those of ordinary
`
`skill in the art.
`
`9.
`
`In exhibit ZILLOW 2016, at 62:15—18, Dr. Borst testified that the output of
`
`an AVM "by definition is not an appraisal." This testimony is relevant to the
`
`assertion on page 12 of the Reply that "the outputs of the Dugan and Kim systems
`
`are the same in nature as the output of the system described in [Cheng]." The
`
`\ testimony is relevant because it clarifies that the output of an AVM, such as the
`
`system described in Cheng (see Observation #1), is not an appraisal.
`
`10.
`
`In exhibit ZILLOW 2016, at 42:12-18, Dr. Borst testified that Dugan's IPS
`
`values are not based on a regression over sales but, rather, are manual human
`
`inputs, "opinions in effect." This testimony is relevant to the statements on
`
`page 23 of the Response that "Dugan's appraiser IPS values .
`
`.
`
`. are 'based, in part,
`
`on the seller or buyer's IPS values,’ which 'only represent the values for that
`
`particular buyer and seller'" and "regardless of the IPS values used. .
`
`., Dugan's
`
`appraisal is based on subjective preferences." The testimony is relevant because it
`
`supports the statements on page 23 of the Response.
`
`
`
`submitted,
`
`
`‘5'
`
`Respectfull
`
`Steven D. Lawrenz '
`
`Registration No. 37,376
`Lead Counsel for Patent Owner
`
`56920-8901 .USOO/LEGAL28074157.1
`
`5
`
`
`
`CERTIFICATE OF SERVICE
`
`The undersigned hereby certifies that a copy of these OBSERVATIONS ON
`
`CROSS EXAMINATION OF DR. RICHARD A. BORST, Ph. D. and the exhibits
`
`filed herewith have been served Via EXPRESS MAIL on October 10, 2013 upon
`
`the following:
`
`W. Karl Renner, Lead Counsel
`Fish & Richardson P.C.
`
`P. O. Box 1022.
`
`Minneapolis, MN 55440-1022
`
`Thomas A. Rozylowicz, Back-Up Counsel
`Fish & Richardson P.C.
`
`P. O. Box 1022.
`
`Minneapolis, MN 55440-1022
`
` Steven 5 Lawrenz
`
`Attorney
`PerkinsCoie LLP
`
`56920-8901 .USOO/LEGAL28074157. 1
`
`6
`
`
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